Mahindra & Mahindra (M&M) has sold its entire 3.5% stake in RBL Bank for ₹678 crore, earning a 62.5% return in just over two years.
The sale comes as Emirates NBD prepares to acquire a majority stake in the lender through a $3-billion transaction, in what would mark the largest cross-border deal in India’s financial sector. Under the country’s stock market regulations, this transaction triggers a mandatory open offer, set to open on December 12.
M&M had bought the 3.53% stake in July 2023 for ₹417 crore as part of a long-term treasury investment.
With the Dubai-based bank now set to buy 60% of RBL for around $3 billion, M&M appears to have seized the opportunity to book gains. The open offer, priced at ₹280 per share, will open on December 12. RBL stock currently trades between ₹320 and ₹330.
India’s banking regulations cap foreign investment in private banks at 74%, while a single overseas investor can’t own more than 15% without RBI approval.
The RBL Bank open offer is priced at ₹280 apiece. The stock is currently trading at in the ₹320-330 range.
India allows 74% foreign investment in private banks but limits shareholdings of any single foreign institution to 15% unless regulator the Reserve Bank of India grants an exemption.
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